Friday, 28th March 2008 - 11:31CET
Deficit widens as social benefits bill grows
Government spending grew faster than revenue in the first two months of this year, widening the deficit between recurrent revenue and total expenditure by €43.4 million to €143.0 million when compared to the same period of 2007.
The National Statistics Offoce (NSO) said an increase of €86.8 million in total expenditure (excluding equity acquisition) was partly offset by an increase of €43.4 million in recurrent revenue.
The Consolidated Fund recorded an increase of €13.6 million in revenue from income taxes, while revenue from fees of office and from the Central Bank of Malta increased by €5.6 million and by €5.4 million respectively. Dividends on investment also yielded €9.0 million during the period under review, while no such proceeds were recorded in the corresponding period last year.
Recurrent expenditure amounted to €352.0 million, an increase of €53.5 million compared to January and February 2007. The major increases were in social benefits which added €18.1 million -- this was the period when the new Children's allowance cheques were issued. Spending by the Ministry for Rural Affairs and the Environment grew by €11.5 million.
Public debt servicing costs for January and February 2008 increased by €3.9 million, and amounted to €31.8 million.
Government's outlay on its Capital Programme (excluding equity acquisition) for the first two months of this year amounted to €53.4 million, an increase of €29.5 million when compared to the expenditure of €23.9 million for the
same period last year.
The Central Government debt outstanding at the end of February amounted to €3,285.5 million, an increase of €108.1 million compared to the gross Central Government debt outstanding at the end of February 2007.
While long-term borrowing increased by €136.4 million, short-term borrowing and foreign borrowing declined by €44.2 million and €6.5 million respectively. At the end of February, the stock of euro coins added to the gross government debt amounted to €22.4 million.
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Comments
Do you know by any chance the comparable HICP rates across the Europzone? And Russia?
IBERBAQ GONZI U THALLAS INT
There is one option left for the government, to cut down in public spending and that is to rein in the welfare social services. Social services are the biggest expenditure the Malta government has and part of it is the National Security (pensions).
So watch out for any hints made by the newly installed Minister for social services for either a cut in entitlements or users fees.
Remember, we can only privatise once! If we let go of AirMalta and BOV, what would we have left? As long as they're run efficiently they should remain in the public domain. Although I wouldn't really complain too much if they were sold as well.
It is too early to say that the Government is not being accountable for its promises. 2010 is still some way off, you know.
What about cutting the income tax rates now?
Don't tell me that the government wasn't aware of this situation during the electoral campaign!